Brokerage Review: Firstrade

There are a number of online brokers out there, offering you the ability to invest on your own, and make money in the stock market.

One of your choices is Firstrade, a company that has an easy-to-use web site, and a number of impressive mutual funds to select, this looks like a solid option at first blush. However, you do need to be careful, particularly if you regularly execute large orders, or if you are into penny stocks or other low-priced stocks.

Overview of What Firstrade Offers

First, it helps to understand what Firstrade offers. The company offers a variety of investments, at fairly reasonable rates:

Stocks and ETFs can be traded with relative ease. There is a flat fee of $6.95 per trade. However, if you buy stocks that are priced under $2, you will pay a surcharge of 50 cents per share. This surcharge is also applied if your trade order includes more than 5,000 shares.

Options can also be traded through Firstrade. You will pay $6.75 per trade, plus 75 cents per contract for market and limit orders.

Mutual funds don’t come with a transaction fee if you buy a load fund. However, you will pay $9.95 for a no-load fund. There are more than 10,000 funds to choose from with Firstrade, which is fairly impressive. However, it’s important to note that there is a $19.95 fee if you hold the mutual fund for less than 180 days.

Bonds come with a cost based on the net yield basis.

CDs cost money as well. You will pay $30 for a primary market CD, or the net yield basis for a secondary market CD.

Margin loans are also available if you want to leverage your investments. You do need to be careful, though, since this type of leverage also means that your losses are magnified as well as your gains.

As you can see, depending on your investment preferences, Firstrade can get fairly expensive. If you trade actively, and especially if you focus on large lots and stocks with small values, Firstrade might be too costly for you to use. You might find your real returns eroded by all the fees that you will pay.

Firstrade does offer you the ability to open an IRA account. You can open an IRA, or you can roll over the money from your current retirement account into an IRA opened with Firstrade. It’s also possible to transfer an IRA. There are no annual fees for IRA accounts, nor are there setup or termination fees for these accounts.

There are a number of other accounts available on top of IRAs (including SEP and SIMPLE IRAs). You can also open a Coverdell ESA, as well as custodial accounts on behalf of your minor children.

There are no fees for opening a Firstrade account, and you will pay no minimums. There aren’t maintenance or inactivity fees, either. On top of that, if you are investing in dividend paying stocks, you have access to free dividend reinvestment.

Features of Firstrade

While the web site has improved somewhat recently, the trading tools offered by Firstrade are not as impressive as the tools offered elsewhere. While web site interface is easy to use, and you customize the way it looks to you, and the way your information is displayed, and you can link your accounts, as well as monitor your daily balance changes, Firstrade’s trading platform could use a little work.

The reality is that Firstrade doesn’t really provide some of the same ease of trading, in spite of how easy it is to navigate the site. There are some solid research tools that you can use, though. Some of them include:

Interactive charts that include technical analysis. You can also save your chart settings so that you can come back to them easily.

You can customize your screeners to find investments that you are interested in, and that might make good choices for you, depending on your goals.

Streaming quotes that allow you to see prices in real time.

News on stocks, mutual funds, and ETFs. You can find company news and information fairly easily, as well as read S&P stock reports as well as commentary.

You can also make use of economic calendars that can show you how to look ahead to what’s next for the market.

Set up stock alerts so that you can receive a message when something that meets your criteria appears, and you can move on it quickly.

Firstrade also provides some education. There is an investment glossary, as well as strategy guides that can help you identify what might work for you. Additionally, there is a tax guide. You can use these education tools to your advantage, and help you make better decisions with your investment dollar.

Overall, Firstrade can provide the investor with the necessary tools to trade. However, for those who want really advanced tools, as well as those who want to make big trades, this might not be the best option. It is a little expensive, and some of the tools are a little clunky.